site.bta Industrial Association Warns Politicians against Dramatic Changes to Pension System

Industrial Association Warns Politicians against Dramatic Changes to Pension System


Sofia, January 19 (BTA) - The Executive Chairman of the
Bulgarian Industrial Association (BIA), Bozhidar Danev, on
Monday urged politicians to be cautious about pension reforms
and warned against dramatic changes. Danev was speaking at a
joint press conference of BIA and the Confederation of
Independent Trade Unions in Bulgaria (CITUB) in response to
plans unveiled by the Labour Minister to increase pension
contributions.

Danev said: "We have been lied to by five governments."
According to him, Bulgaria lacks fiscal room to ensure the
stability of its pension system.

Danev said that decisions that are rushed without prior
discussion are counterproductive for the Bulgarian economy and
that employers expected a sensible decision about the pension
system.

Also, Danev said that transferring second pillar accounts from
private funds to the National Social Security Institute will put
a strain on the public fund.

CITUB leader Plamen Dimitrov recalled the union's position about
a gradual increase by 0.5 percentage points of pension
contributions based on estimates showing when workers and
employers will be able to afford it. Dimitrov recalled that
CITUB warned that the reduction of pension contributions would
decapitalize the system.

Dimitrov said that a World Bank assessment a year earlier
suggested that pension contributions should go up by 7
percentage points in order to balance the system. Despite their
differences, Dimitrov and Danev said they hoped for a solution
by the end of March that would be supported by both trade unions
and employers.